Accessible Version of Figures

Figure 1. Foreign net purchases of U.S. securities, by type of purchaser, and U.S. current account deficit, 2002-09.

Data are shown as curves (for the U.S. current account deficit) and stacked bars (for foreign net purchases of U.S. securities). Units are billions of U.S. dollars, annual rate. Data for the U.S. current account deficit are displayed quarterly from 2002 through the second quarter of 2009. Data for foreign net purchases of U.S. securities are displayed for years 2002 through the first half of 2009; data for 2007 and 2008 are displayed as half-years at an annual rate; data for the first two quarters of 2009 are displayed as quarters at an annual rate. The current account deficit rises from about $400 billion in the first quarter of 2002 to more than $500 billion in 2005, and then rises steadily to about $800 billion in 2006. It dips to about $675 billion in the second half of 2007, picks up to about $175 billion in the first three quarters of 2008, and then declines to about $400 billion in the first and second quarters of 2009. Foreign official purchases of U.S. securities increase from about $100 billion in 2002 to about $400 billion in 2004, move down to about $200 billion in 2005, and then pick up to about $450 billion in 2006 and remain about this level in 2007. Foreign official purchases increase further to about $750 billion in the first half of 2008, moderate to about $215 billion in the second half of 2008, increase slightly to about $280 billion in the first quarter of 2009, and increase further to about $480 billion in the second quarter of 2009. Foreign private purchases of U.S. securities are about $390 billion in 2002, dip slightly in 2003, and then rise steadily to about $630 billion in 2006. They spike at more than $1 trillion in the first half of 2007 and then fall sharply to about $300 billion in the second half of 2007, to $85 billion in the first half of 2008, to $50 billion in the second half of 2008, and show small negative values (net sales) in the first and second quarters of 2009. Total foreign purchases of U.S. securities exceed the current account deficit by increasing amounts from 2002 through the first half of 2007, when the excess is about $680 billion. Total foreign purchases exceed the current account deficit by small amounts through the first half of 2008, but fall short of the current account deficit by about $400 billion in the second half of 2008 and by about $125 billion in the first quarter of 2009. Total foreign purchases are about $100 billion larger than the current account deficit in the second quarter of 2009.

* For illustrative purposes, the U.S. current account deficit is shown as a
positive value.

SOURCE: For foreign official and foreign private, and in subsequent figures except as noted, staff estimates from data collected through the Treasury International Capital reporting system; for U.S. current account deficit, Bureau of Economic Analysis.

Figure 2. Total foreign holdings and foreign official holdings of U.S. Treasury securities, 1995-2009.

Data are shown as curves. Units are billions of U.S. dollars. Data are monthly from 1995 through June 2009. Total foreign holdings of U.S. Treasury securities increase steadily from about $600 billion in January 1995 to around $1.2 trillion by late 1997, are about flat through early 1999, dip slightly to about $1 trillion by mid-2001, rise steadily with some slight monthly variation to about $2.5 trillion in early 2008 and then rise more sharply to reach about $3.5 trillion by June 2009. Foreign official holdings of U.S. Treasury securities show a similar pattern, increasing slightly from about $400 billion in early 1995 to about $600 billion by late 1997 to about $700 billion by mid-2001. It then rises steadily with some slight monthly variation to about $1.8 trillion in early 2008 and rises more sharply to reach about $2.7 trillion by June 2009.

Data are shown as stacked bars. Units are billions of U.S. dollars, annual rate. Data are displayed for years 2002 through the first half of 2009; data for 2007 and 2008 are displayed as half-years at an annual rate; data for the first two quarters of 2009 are displayed as quarters at an annual rate.
Foreign official purchases of U.S. Treasury securities are about $60 billion in 2002 and rise to nearly $300 billion by 2004. They are smaller at about $100 billion in 2005 but then pick up again to about $200 billion in 2006. They are again somewhat smaller at about $80 billion in the first half of 2007 and about $100 billion in the second half of 2007, and then increase to about $360 billion in the first half of 2008, to nearly $600 billion in the second half of 2008, and remain sizable at nearly $500 billion in the first and second quarters of 2009. Foreign private purchases of U.S. Treasury securities average about $100 billion from 2002 through 2005, show small net sales in 2006, and then again average about $100 billion through the first half of 2008. Foreign private purchases increase noticeably to about $320 billion in the second half of 2008, and then moderate to about $150 billion in the first quarter of 2009 and show a very small increase in the second quarter of 2009.

Figure 4. U.S. Treasury securities outstanding, and foreign holdings of U.S. Treasury securities as a share of such securities outstanding, by type of security, 2006-09.

Data are shown as curves. The Figure contains two panels. In the top panel, units are billions of U.S. dollars; in the bottom panel, units are percent. Data are monthly from 2006 through June 2009.

In the top panel, all U.S. Treasury securities outstanding increase slightly from about $3.5 trillion in early 2006 to about $4 trillion in early 2008, then increase more rapidly to more than $5 trillion by September 2008. They plateau at more than $5 trillion through end-2008 and then rise to nearly $6 trillion by June 2009. U.S. Treasury bills outstanding are relatively constant at about $750 billion in 2006 and 2007, increase to about $1 trillion by mid-2008, and then rise more sharply to about $2 trillion by September 2008. They dip slightly from end-2008 through early 2009 but then rise again to about $2 trillion through June 2009.

In the bottom panel, foreign holdings as a share of all U.S. Treasury securities outstanding dip slightly from about 58 percent in early 2006 to about 55 percent in March and April, then increase slightly to about 65 percent by late 2007, decrease slightly with some monthly variation to about 58 percent in the third quarter of 2008, increase again to about 63 percent by December 2008, and then move down slightly to about 58 percent by June 2009. Foreign holdings of U.S. Treasury bills as a share of such securities outstanding move between about 36 and 40 percent from early 2006 through late 2007, dip slightly with some monthly variation to about 35 percent through September of 2008, and then increase to average between 42 and 43 percent through June 2009.

NOTE: U.S. Treasury securities outstanding are constructed as marketable U.S. Treasury debt held by the public, excluding holdings of the Federal Reserve System Open Market Account.

SOURCE: For U.S. Treasury securities outstanding, staff estimates from U.S. Treasury, Monthly Statement of the Public Debt of the United States; and Federal Reserve Board, Statistical Release H.4.1, "Factors Affecting Reserve Balances." For foreign holdings of U.S. Treasury securities, staff estimates from data collected through the Treasury International Capital reporting system.

Figure 5. Foreign private net purchases of U.S. securities other than U.S. Treasury securities, by type of security, 2002-09.

Data are shown as stacked bars. Units are billions of U.S. dollars, annual rate. Data are displayed for years 2002 through the first half of 2009; data for 2007 and 2008 are displayed as half-years at an annual rate; data for the first two quarters of 2009 are displayed as quarters at an annual rate. Foreign private purchases of equity average about $50 billion in 2002 through 2004, and then increase to about $90 billion in 2005, to $140 billion in 2006, and to about $300 billion in the first half of 2007. They decrease to about $170 billion in the second half of 2007, to about $120 billion in the first half of 2008, are nil in the second half of 2008, are a very small positive in the first quarter of 2009, and then increase to about $150 billion in the second quarter of 2009. Foreign private purchases of long-term corporate debt increase steadily from about $150 billion in 2002 to about $300 billion in 2005, then increase more to about $500 billion in 2006 and to about $675 billion in the first half of 2007. They then decrease noticeably to about $80 billion in both the second half of 2007 and the first half of 2008, switch to negative $80 billion in the second half of 2008 (indicating net sales) and are about negative $50 billion and negative $80 billion in the first and second quarters of 2009. Foreign private purchases of short-term corporate and other debt show very small changes ($40 billion or less) in 2002 through 2005, increase to about $70 billion in 2006 and in the first half of 2007, switch to about negative $50 billion (indicating net sales) in the second half of 2007, are nil in the first half of 2008, and are about negative $100 billion in the second half of 2008, negative $50 billion in the first quarter of 2009, and negative $100 billion in the second quarter of 2009. Foreign private net purchases of U.S. government agency securities are about $75 billion in 2002, negative $40 billion in 2003 (indicating net sales), return to purchases of about $70 billion in 2004, and then show smaller purchases of between $25 billion and $50 billion for 2005 through 2007. Foreign private net purchases switch to about negative $200 billion (indicating net sales) in the first and second halves of 2008 and in the first quarter of 2009, and show very small net sales in the second quarter of 2009.

NOTE: Short-term corporate and other debt consists primarily of commercial paper, negotiable certificates of deposit, and bankers' acceptances. See also general note to Figure 1.

Figure 6. U.S. issuance, and foreign gross purchases, of U.S. corporate debt, 2006-09.

Data are shown as curves. Units are billions of U.S. dollars. Data are monthly from 2006 through June 2009. U.S. issuance of corporate debt is a volatile monthly series, moving between $170 billion and $250 billion in 2006 but with a trough of about $120 billion in July 2006. It picks up slightly in the first half of 2007, spiking at a bit more than $300 billion in March 2007 and also remaining elevated at just a bit less than $300 billion in May and June 2007. Corporate issuance moves between $130 billion and $170 billion from July through October 2007 and then decreases to move between $85 billion and $115 billion in late 2007 and early 2008, before declining further to about $70 billion in February and March. Corporate issuance picks up to about $125 billion in April 2008 and about $140 billion in May 2008, but then falls sharply and moves between $25 billion and $45 billion from July and November 2008. It picks up somewhat between December 2008 and June 2009, moving between $60 billion and $110 billion. Foreign gross purchases of U.S. corporate debt are also a volatile monthly series that tracks the U.S. issuance data with peaks and troughs in many of the same months. Foreign gross purchases move between about $110 billion and $180 billion in 2006, with a trough of about $95 billion in July 2006. Gross purchases pick up slightly in 2007, spiking at about $190 billion in March 2007 and $215 billion in May 2007. Gross purchases move between $120 billion and $170 billion from July 2007 through early 2008 and then spike at about $190 billion in May 2008. Gross purchases then move down to around $90 billion from August 2008 through November 2008 with more limited monthly variation. They then pick up somewhat in December 2008 through June 2009 to move between about $90 billion and about $140 billion.

SOURCE: For U.S. issuance, staff estimates based on data from the Depository Trust & Clearing Corporation and Thomson Financial; for foreign gross purchases, staff estimates from data collected through the Treasury International Capital reporting system.

Figure 7. Foreign official net purchases of U.S. securities, by type of security, 2002-09.

Data are shown as stacked bars. Units are billions of U.S. dollars, annual rate. Data are displayed for years 2002 through the first half of 2009; data for 2007 and the first half of 2008 are displayed as half-years at an annual rate; data for the last two quarters of 2008 and the first two quarters of 2009 are displayed as quarters at an annual rate. Foreign official net purchases of U.S. government agency securities increase slightly from about $50 billion in 2002 to about $100 billion in 2004 and 2005, pick up more noticeably to about $200 billion in 2006, to about $275 billion in the first half of 2007, to about $200 billion in the second half of 2007, and to about $275 billion in the first half of 2008. Foreign official net purchases of U.S. government agency securities switch to about negative $70 billion in the third quarter of 2008 (indicating net sales), plunge to more than negative $600 billion in the fourth quarter of 2008, and show smaller net sales of about negative $50 billion and negative $25 billion in the first and second quarters of 2009. Foreign official purchases of U.S. Treasury securities are about $60 billion in 2002 and rise to nearly $300 billion by 2004. They are smaller at about $100 billion in 2005 but then pick up again to about $200 billion in 2006. They are somewhat smaller at about $80 billion in the first half of 2007 and about $100 billion in the second half of 2007. They increase to about $360 billion in the first half of 2008, to more than $400 billion in the third quarter of 2008, spike at more than $700 billion in the fourth quarter of 2008, and remain sizable at nearly $500 billion in both the first and second quarters of 2009. Foreign official purchases of all other securities are minimal from 2002 through 2005; register about $40 billion in 2006 and the first half of 2007; pick up noticeably to more than $150 billion in the second half of 2007 and, again, in the first half of 2008; and then show minimal net purchases for the third and fourth quarters of 2008 and the first two quarters of 2009.

NOTE: All other consists of long-term corporate debt and equity. See also general note to Figure 1.

Figure 8. U.S. net purchases of foreign securities, by type of security, 2002-09.

Data are shown as stacked bars. Units are billions of U.S. dollars. Data are displayed for years 2002 through the first half of 2009; data for 2007 and 2008 are displayed as half-years at an annual rate; data for the first two quarters of 2009 are displayed as quarters at an annual rate. U.S. purchases of foreign equity are less than $20 billion in 2002, increase to about $120 billion in 2003, are a bit less than $100 billion in 2004, increase to nearly $200 billion in 2005, are about $140 billion in 2006 and are a bit more than that in 2007. Purchases of foreign equity edge down to about $125 billion in the second half of 2007, edge down further to about $100 billion in the first half of 2008, and then switch to about negative $100 billion (indicating net sales) in the second half of 2008. Purchases are minimal in the first quarter of 2009, and then pick up to about $150 billion in the second quarter of 2009. U.S. purchases of foreign long-term debt are about $30 billion in both 2002 and 2003, increase to almost $100 billion in 2004, are about $60 billion in 2004, and then pick up noticeably to about $225 billion in 2006 and to nearly $300 billion in the first half of 2007. Purchases of foreign bonds move down to about $150 billion in the second half of 2007, move down further to about $80 billion in the first half of 2008, and then switch to about negative $170 billion (indicating net sales) in the second half of 2008. Purchases of foreign bonds resume in the first quarter of 2009, registering about $140 billion, and pick up further to more than $200 billion in the second quarter of 2009. U.S. purchases of foreign short-term securities are about $25 billion in 2002 and switch to about negative $75 billion in 2003 (indicating net sales). Purchases resume in 2004 at about $25 billion, pick up to about $50 billion in 2005, are about $40 billion in 2006, and are about $60 billion in the first half of 2007. They switch to about negative $80 billion in the second half of 2007 (indicating net sales) and then show minimal net purchases in the first half of 2008. Net sales occur again in the second half of 2008 (of nearly negative $50 billion), and net purchases resume in the first quarter of 2009 (about $20 billion) and pick up to about $40 billion in the second quarter of 2009.

Figure 9. U.S. cross-border net banking flows for banks' own accounts, and central bank swap flows and other U.S. official asset flows, 2004-09.

Data are plotted as stacked bars, and the bars can represent positive or negative values. Units are billions of U.S. dollars. Bars are shown annually for 2004-2006 and semiannually for 2007 through the first half of 2009. The bar segments for net banking flows for banks' own accounts show some small negatives and some small positives, in the range of $30 billion to $50 billion from 2004 through the first half of 2007. Net banking flows become more negative in the second half of 2007 and first half of 2008, reaching more than negative $200 billion. They switch to a large positive value for the second half of 2008 of approximately $350 billion, and then negative $400 billion for the first half of 2009. Central bank swap flows and other U.S. official asset flows are negligible, less than $20 billion, until 2008. These bar segments grow from approximately negative $30 billion in the first half of 2008 to more than negative $500 billion in the second half of 2008, then switch to approximately $440 billion in the first half of 2009.

NOTE: Semiannual values not annualized. A positive value indicates a net financial inflow to the United States, and a negative value indicates a net financial outflow from the United States.

Figure 10. Banking offices in the United States: Banks' own gross cross-border claims on foreigners, and their own gross cross-border liabilities to private foreigners, 2004-09.

Data are plotted as curves. Units are billions of U.S. dollars. Liabilities start at approximately $2.2 trillion and rise steadily through mid-2007, where they level off around $3.4 trillion. Liabilities then start to decline in early 2008, falling rapidly at times, reaching about $2.75 trillion by end-2008 and about $2.7 trillion by June 2009. Claims start at approximately $1.6 trillion and rise steadily to about $3.1 trillion around March 2008, then fall sharply to about $2.5 trillion by end-2008. Claims rise in the first half of 2009, reaching about $2.7 trillion in June 2009, approximately equal to liabilities in that month.

Figure 11. Banking offices in the United States: Gross cross-border claims on foreigners and gross cross-border liabilities to private foreigners, by nationality of parent bank, 2004-08.

Data are plotted as stacked bars where, for each year, there is a bar for liabilities and a bar for claims. The bars contain three segments, one segment for U.S.-owned banks, another segment for European-owned banks, and the other segment for all other banks in the United States. In every year, the liability bar is higher than the claims bar, with the total liabilities and total claims values following the path shown in Figure 10. The U.S.-owned segment represents about 40 to 50 percent of each of the bars. The amount of claims of U.S.-owned banks is much smaller than the liabilities of U.S.-owned banks, but the U.S.-owned share of the total is similar between claims and liabilities. The European-owned segment represents about 35 to 45 percent of each of the bars, although its share falls slightly over the period 2004 to 2008. The amount of liabilities of European-owned banks is similar to the claims of European-owned banks. The bar segments for all other banks represent only about 5 percent of each of the bars (claims and liabilities) in 2004, but that share grows to about 10 percent by 2008.

Figure 12. Banking offices in the United States: Gross cross-border claims on foreigners, gross cross-border liabilities to private foreigners, and net position for U.S.-owned offices and for European-owned offices, 2004-09.

Data are plotted as curves, representing gross cross-border claims on foreigners and gross cross-border liabilities to private foreigners, with shaded regions between the curves representing the net position. Units are billions of U.S. dollars. The Figure contains two panels. The top panel is restricted to banking offices in the United States that are U.S.-owned, and the bottom panel is restricted to banking offices in the United States that are European-owned. Liabilities for U.S.-owned offices start at about $1.2 trillion, rising steadily to about $1.8 trillion around the beginning of 2008, and then declining more rapidly to about $1.4 trillion by June 2009. Claims for U.S.-owned offices start at approximately $750 billion, rising steadily to about $1.25 trillion in early 2008, and then falling modestly to about $1.1 trillion by June 2009. The net borrowing position of U.S.-owned offices, which is the amount by which liabilities exceed claims, starts at about $450 billion and stays fairly constant until early 2008, rising at most to nearly $550 billion, and then shrinks rapidly in 2008, ending at about $300 billion in June 2009.

In the bottom panel, liabilities and claims for European-owned offices are slightly more volatile than those for U.S.-owned offices. Liabilities for European-owned offices start at about $850 billion and rise until early 2007, reaching about $1.5 trillion, and then fall steadily until about September 2008 to about $1.1 trillion. Liabilities then jump up for two months to about $1,200 billion before falling again to just more than $1 trillion by June 2009. Claims of European-owned offices start at about $700 billion, rising to just more than $1.6 trillion by about March of 2008, and then drop rapidly to reach about $1.15 trillion at end-2008 before rising to about $1.25 trillion by June 2009. At the start, European-owned offices are in a net borrowing position of about $150 billion because their liabilities exceed their claims. They continue in a net borrowing position of similar size until 2007, when the net borrowing shrinks and then switches to net lending during the third quarter of 2007 when claims rise above liabilities. The net lending position, the amount by which claims exceed liabilities, grows to a maximum of about $450 billion in the third quarter of 2008 before shrinking rapidly to less than $200 billion by end-2008. The net lending position then widens slightly to just more than $200 billion by June 2009.

Figure 13. Banking offices in the United States: Cumulative changes since 2004 in gross cross-border claims on foreigners and in gross cross-border liabilities to private foreigners, and new net borrowing or lending, for all offices and for European-owned offices, 2004-09

Data are plotted as curves, representing the cumulative change since 2004 in gross cross-border claims on foreigners and gross cross-border liabilities to private foreigners, with shaded regions between the curves representing new net borrowing or new net lending since 2004. Units are billions of U.S. dollars. The Figure contains two panels. The top panel shows data for all banking offices in the United States, and the bottom panel is restricted to banking offices in the United States that are European-owned. Liabilities for all banking offices follow the same path as that described in Figure 10, rising steadily until late 2007, and then flattening for several months before falling rapidly through June 2009. The only difference between this curve and the one in Figure 10 is that the starting value is zero, and therefore all data points on the curve are lower by the amount of the starting value from Figure 10. The same is true for the claims curve for all banking offices, which rises steadily to early 2008, falls rapidly to end-2008, and then rises somewhat by June 2009. Unlike Figure 10, the claims curve, representing the cumulative change in claims since 2004, is higher than the liabilities curve throughout the time period of the figure, with the exception of just a few months in early 2006. Therefore, the region between the curves represents new net lending since 2004 (rather than new net borrowing) throughout most of the time period. The new net lending region is about $50 billion to $100 billion wide during 2004, narrows to near zero in 2006 through early 2007, and then widens slowly through 2007 and rapidly in 2008, reaching about $450 billion in the third quarter of 2008. New net lending narrows to about $50 billion to $100 billion by late 2008 and widens again to more than $500 billion by June 2009.

In the bottom panel, the liabilities and claims curves for European-owned offices follow the same path as in the lower panel of Figure 12. The liabilities curve, representing cumulative changes in liabilities since 2004, rises to early 2007 and then mostly falls through June 2009, ending less than $200 billion higher than the starting point. The claims curve, also representing cumulative changes since 2004, rises until early 2008, falls sharply to end-2008, then rises modestly to June 2009, ending about $550 billion higher than the starting point. The region between the curves mainly represents new net lending since 2004 because the cumulative change in claims is almost always higher than the cumulative change in liabilities. The new net lending region is about $100 billion to $150 billion wide in 2004, shrinks to near zero for 2006 and early 2007, after which it grows rapidly from the third quarter of 2007 to the third quarter of 2008, with a maximum width of more than $500 billion. The new net lending region then narrows to about $200 billion by late 2008 before widening again to about $400 billion by June 2009.

Figure 14. Net flows of U.S.-owned and European-owned banks and of banks with owners of other nationalities, August 2007 through August 2008.

Data are plotted in one stacked bar, with a segment for each of: U.S.-owned banks, European-owned banks, and all other banks. U.S.-owned banks have about $35 billion in inflows (positive bar segment), European-owned banks have about $450 billion in outflows (negative bar segment), and all other banks have about $30 billion in inflows (positive bar segment).

NOTE: A positive value indicates a net financial inflow to the United States, and a negative value indicates a net financial outflow from the United States.

Figure 15. Summed net flows and gross positions of U.S.-owned banks, August 2007 through August 2008.

Data are plotted as a stacked bar and as curves. Units are billions of U.S. dollars. The Figure contains two panels. In the top panel, the data are plotted as a stacked bar, with one segment representing the summed net flows of individual U.S.-owned banks identified as net borrowers, and the other segment representing the summed net flows of such banks identified as net lenders. The summed net flows of the net borrowers are about $270 billion. The summed net flows of the net lenders are about $235 billion. In the bottom panel, data are plotted as curves representing the gross cross-border claims and liabilities of U.S.-owned banks identified as net lenders. The shaded region between the two curves represents the net lending position of these banks. Claims start at just more than $500 billion in August 2007 and rise, with a couple dips, to about $650 billion in June 2008 before falling slightly to just more than $600 billion by August 2008. Liabilities start at just less than $500 billion and fall gradually, with a couple jumps up, to just more than $400 billion in June 2008 and about $370 billion by August 2008. The region indicating net lending starts around $10 billion and widens over the period, with much of the widening happening after March 2008, ending at about $250 billion.

NOTE: For summed net flows, a positive value indicates a net financial inflow to the United States, and a negative value indicates a net financial outflow from the United States. The outflows from net lenders shown in the top panel reflect the change in gross positions shown in the bottom panel.

Figure 16. Net flows of U.S.-owned and European-owned banks and of banks with owners of other nationalities, September 2008 through June 2009.

Data are plotted as two stacked bars, one covering September to December 2008 and the other covering January to June 2009. Units are billions of U.S. dollars. The bars each contain three segments, one segment representing U.S.-owned, another segment representing European-owned, and the other segment representing all other banks. In the first bar, U.S.-owned banks have an outflow of about $40 billion (a negative bar segment), European-owned banks have an inflow of about $300 billion (a positive bar segment), and all other banks have an inflow of about $100 billion (a positive bar segment). In the second bar, all bar segments are negative. U.S.-owned banks have an outflow just less than $200 billion, European-owned banks have an outflow of about $100 billion, and all other banks have an outflow of more than $100 billion.

Figure 17. Foreign holdings of U.S. securities adjusted for foreign net acquisitions, and such holdings also adjusted for valuation changes, by type of security, 2005-09.

Data are plotted as bars. Units are billions of U.S. dollars. The Figure contains two panels. The top panel depicts foreign holdings of U.S. equity, U.S. corporate debt, U.S. government agency, and U.S. Treasury securities adjusted for foreign net acquisitions. The data are monthly, spanning January 2005 to June 2009. The aggregate of the four bars begins at $6.5 trillion in January 2005, rising steadily until reaching $9.5 trillion halfway through 2007. The aggregate continues to increase, but at a lower rate until peaking at $10.6 trillion when the data end in June 2009. Foreign holdings of U.S. equity securities rise continuously from an initial $2.3 trillion in January 2005 to $2.8 trillion in June 2009. Foreign holdings of U.S. corporate debt begin at $1.4 trillion, rise to $3.2 trillion in June 2007, and remain constant at the same level until June 2009. Foreign holdings of U.S. government agency securities exhibit a similar trend, beginning at a level of $900 billion, expanding to $1.6 trillion mid-2008, and then contracting to $1.2 trillion in June 2007. Foreign holdings of U.S. Treasury securities begin at $1.9 trillion in January 2005, slowly rise until reaching $2.8 trillion in August 2008, and expand more rapidly to a final value of $3.4 trillion in June 2009.

The bottom panel displays foreign holdings of U.S. equity, U.S. corporate debt, U.S. government agency, and U.S. Treasury securities adjusted for foreign net acquisitions and valuation changes. As before, the data are monthly and span January 2005 to June 2009. The aggregate of the four bars rises consistently from an initial value of $6.5 trillion to $7.6 trillion in June 2006, then increases more rapidly until leveling off at $10.6 trillion in early 2008. The value then falls to a low of $9.3 trillion in February 2009 and recovers to $9.8 trillion by June 2009. Foreign holdings of U.S. equity securities begin at $2.1 trillion, rising steadily until reaching $3 trillion in early 2008, although increasing more rapidly after June 2006. The level sharply contracts to $1.5 trillion in February 2009 before returning to $2.1 trillion in June 2009. Foreign holdings of U.S. corporate debt rise from an initial value of $1.9 until peaking at $3.4 trillion in early 2008. These holdings contract to $2.2 trillion in late 2008 before rising to a final value of $2.9 trillion. Foreign holdings of U.S. government agency securities begin at $0.9 trillion and slowly increase to $1.7 trillion in June 2008. These holdings dip slightly to $1.4 trillion by June 2009. Foreign holdings of U.S. Treasury securities rise steadily from $1.9 trillion in January 2005 to $2.8 trillion by mid-2008, and then rapidly increase to $3.4 trillion by June 2009.

Figure 18. U.S. holdings of foreign securities adjusted for U.S. net acquisitions, and such holdings also adjusted for valuation changes, by type of security, 2005-09.

Data are plotted as bars. Units are billions of U.S. dollars. The Figure contains two panels. The top panel depicts U.S. holdings of foreign equity and debt securities, adjusted for U.S. net acquisitions. The data are monthly, covering January 2005 to June 2009. The aggregate of U.S. holdings of foreign equity and debt securities begins at $3.8 trillion and rises steadily to $4.8 trillion by July 2007. The aggregate dips very slightly between June 2008 and December 2008, but recovers to $4.8 trillion when the data end in June 2009. U.S. holdings of foreign equity securities increase steadily from $2.7 trillion in January 2005 to $3.1 trillion in July 2007, where the level remains relatively constant until June 2009, though with a very slight dip between June and December 2008, and a subsequent recovery. U.S. holdings of foreign debt securities exhibit an identical trend, rising from an initial value of $1.1 trillion to $1.7 trillion by July 2007, and staying relatively constant until June 2009.

The bottom panel displays U.S. holdings of foreign debt and equity securities adjusted for U.S. net acquisitions and valuation changes. As in the previous panel, data are monthly and extend from January 2005 to June 2009. The aggregate of U.S. holdings of foreign equity and debt securities begins at $3.8 trillion, increasing rapidly to a peak of $7.4 trillion in late 2007. The aggregate then declines sharply to $3.9 trillion in February 2009 before recovering to $5.0 trillion by June 2009. U.S. holdings of foreign equity securities rise from $2.7 trillion in January 2009 to a $5.5 trillion peak in late 2007. These holdings rapidly contract to $2.5 trillion in February 2009 before bouncing up to $3.1 trillion in June 2009. U.S. holdings of foreign debt securities expand from an initial value of $1.1 trillion to $1.9 trillion in late 2007, before suffering a decline to $1.4 trillion in February 2009. After February, these holdings increase slightly to $1.9 trillion in June 2009.

Data are plotted as curves. Units are billions of U.S. dollars. Foreign gross purchases and foreign gross sales are volatile monthly series that track each other closely. They rise from about $700 billion in the beginning of 2000 to $1.8 trillion in 2007. Both foreign gross purchases and foreign gross sales abruptly jump to $3.0 trillion during 2007, and hover at this level before dropping sharply to $1.4 trillion at the beginning of 2009. The two curves rise to $2.0 trillion by June 2009. Foreign net purchases are a much less volatile monthly series, and increase slightly over the period, although remaining near $100 billion until mid-2008. At this point foreign net purchases briefly dip below zero before returning to $100 billion by June 2009.

Data are plotted as curves. Units are billions of U.S. dollars. Liabilities start at approximately $700 billion, rise sporadically to about $1.1 trillion by mid-2007, and then fall slowly to about $900 billion in mid-2008 before plunging to just more than $450 billion by end-2008. By June 2009, repurchase agreement liabilities stabilized around $500 billion. Repurchase agreement claims start a little more than $500 billion, and rise sporadically to about $900 billion in early 2008. Claims fall gradually in mid-2008 and dramatically in the last quarter of 2008, ending 2008 a little less than $500 billion before rising slightly to about $550 billion by June 2009.

Data are plotted as bars. Units are billions of U.S. dollars. Data are displayed on a quarterly basis from the first quarter of 2006 to the second quarter of 2009. The Figure contains two panels. The top panel depicts liabilities increasing quickly from just more than $400 billion in the first quarter of 2006 to around $900 billion in the third quarter of 2007. Liabilities hover at this level until the fourth quarter of 2008, where they fall and remain relatively stable at $800 billion through the second quarter of 2009. The bottom panel shows claims rising from an initial value of $1.3 trillion to a peak of $1.6 trillion in the fourth quarter of 2007. Claims then fall rapidly until stabilizing at $1.2 trillion in the second quarter of 2009.

NOTE: Liabilities are loans made to U.S. resident firms or individuals by foreigners, mostly foreign banks; claims are loans to foreigners and deposits in foreign banks made by U.S. resident firms or individuals.

SOURCE: Data collected through the Treasury International Capital reporting system, combined with balance of payments data from the Bureau of Economic Analysis.

Data are plotted as bars. Units are billions of U.S. dollars. Data are displayed on a quarterly basis from the first quarter of 2006 to the second quarter of 2009. The Figure contains two panels. The top panel depicts liabilities rising from around $80 billion at the beginning of 2006 to a peak of almost $200 billion in the third quarter of 2007. Liabilities then decline to $150 billion in the fourth quarter of 2007 and remain at a similar level through the second quarter of 2009. The bottom panel displays claims increasing from just less than $400 billion in the first quarter of 2006 to $540 billion in the second quarter of 2007. Claims decline rapidly to $320 billion by the third quarter of 2008 and hover at that level until the second quarter of 2009.

NOTE: The majority of these claims and liabilities are in the form of intercompany balances. Such balances represent transactions between firms in a direct investment relationship, but the transactions are excluded from direct investment data when both firms are classified in the finance industry, and they are excluded from banking data when other firms are neither banks nor securities brokers.

Figure 23. Cross-border portfolio investment: Domestic net acquisitions of foreign securities for the euro area, the United Kingdom, and Japan, by type of security, 2002-09.

Data are plotted as stacked bars. Units are billions of U.S. dollars, annual rate. The Figure contains three panels. In each panel, data are displayed for years 2002 through the first half of 2009; data for 2007 and 2008 are displayed as half-years at an annual rate; data for the first two quarters of 2009 are displayed as quarters at an annual rate. The top panel displays domestic net acquisitions of foreign equity, bonds and notes, and money market instruments for the euro area. Acquisitions of equity begin at less than 50 billion U.S. dollars, steadily rising to around $200 billion by 2006. Equity remains positive but shrinks to $100 billion in the second half of 2007, before abruptly dropping to more than negative $200 billion (indicating net sales) by the second half of 2008. In the first two quarters of 2009, this category experiences a moderate recovery, returning to a small positive value in the second quarter. Acquisitions of bonds and notes exhibit a similar trend at a larger magnitude, starting at a value of $100 billion in 2002 that rise to $500 billion at its peak in the first half of 2007.Bonds and notes briefly drop to $300 billion in the second half of the year, and move to $400 billion in the first half of 2008 before falling to negative $300 billion by the first quarter of 2009. This category recovers to just less than $100 billion in the second quarter of 2009. Money market instruments hover around $50 billion until the first half of 2007, when they jump to $200 billion. Acquisitions of money market instruments return to $50 billion in the second half of the year, jump up to $300 billion, and suddenly fall to negative $200 billion. This category returns to $100 billion for the first two quarters of 2009.

The middle panel depicts domestic net acquisitions of foreign equity, bonds and notes, and money market instruments for the United Kingdom. Acquisitions of equity begin as a small negative value in 2002 before moving slightly positive the next year. Equity jumps to just less than $200 billion in 2004 and remains there until the first half of 2007, after which it plummets to zero followed by a shift to negative $200 billion (indicating net sales) in the first half of 2008. Equity returns to small positive values by the second quarter of 2009. Bonds and notes take small positive values until 2004, when acquisitions of these securities increase abruptly to $200 billion followed by a steady increase to $300 billion by the first half of 2007. Bonds and notes then alternate between negative and positive values of less than $100 billion before moving to negative $200 billion in the second half of 2008. Acquisitions of bonds and notes return to around $200 billion for the first two quarters of 2009. Money market instruments begin with a small positive value, gradually increasing to $50 billion in the first half of 2007. Acquisitions of money market instruments then oscillate from negative $100 billion in the second half of 2007 to a small positive value and back to negative $100 billion for the second half of 2008. Money market instruments return to the $50 billion level for the first two quarters of 2009.

The bottom panel shows domestic net acquisitions of foreign equity, bonds and notes, and money market instruments for Japan. Acquisitions of equity hover around $50 billion from 2002 until the first half of 2008. Equity jumps to $100 billion for the next two periods before shrinking to less than $25 billion in the second quarter of 2009. Acquisitions of Bonds and notes also take an initial value of $50 billion, but immediately rise to nearly $200 billion until 2005. Acquisitions of these securities then return to $50 billion the next year and steadily increase to $200 billion by the first half of 2008. Bonds and notes again drop to $50 billion in the second half of 2008, and leap to more than $200 billion for the first two quarters of 2009. Acquisitions of money market instruments remain small and negative (indicating net sales) from 2002 to the end of 2007. For 2008 and the first two quarters of 2009, money market instruments take small positive values, but return to around negative $10 billion in the second quarter of 2009.

NOTE: See general note to Figure 1.

SOURCE: Staff estimates from balance of payments accounts as reported by the European Central Bank, U.K. Office for National Statistics, and Bank of Japan via Haver Analytics.

Figure 24. Cross-border portfolio investment: Foreign net acquisitions of domestic securities for the euro area, the United Kingdom, and Japan, by type of security, 2002-09.

Data are plotted as stacked bars. Units are billions of U.S. dollars, annual rate. Data are displayed for years 2002 through the first half of 2009; data for 2007 and 2008 are displayed as half-years at an annual rate; data for the first two quarters of 2009 are displayed as quarters at an annual rate. The Figure contains three panels. The top panel depicts foreign net acquisitions of domestic equity, bonds and notes, and money market instruments for the euro area. Acquisitions of equity rise steadily from $100 billion in 2002 to $400 billion in the first half of 2007. In the second half of 2007, acquisitions of equity shrink to less than $100 billion, return to $200 billion in the next period, and decline sharply to almost negative $600 billion (indicating net sales) in the second half of 2008. Equity increases to more than $200 billion by the second quarter of 2009. Acquisitions of bonds and notes rise from almost $200 billion in 2002 to $600 billion in the first half of 2007. Bonds and notes then drop to $300 billion, return to $600 billion in the first half of 2008, and shrink to less than $100 billion at the end of 2008. Acquisitions of these securities rise to $500 billion in the first quarter of 2009 and shrink to $200 billion in the second quarter. Acquisitions of money market instruments remain at small positive values from 2002 to 2005, after which they briefly dip below zero and jump to nearly $200 billion in the first half of 2007. Acquisitions of money market instruments then return to small positive values, increase to almost $600 billion in the second half of 2008, and shrink to just less than $300 billion by the second quarter of 2009.

The middle panel shows foreign net acquisitions of domestic equity, bonds and notes, and money market instruments for the United Kingdom. Acquisitions of equity fluctuate between positive and negative values of less than $50 billion between 2002 and the first half of 2007. These acquisitions reach $50 billion in the second half of 2007 and jump to more than $100 billion in the first half of 2008. Equity then briefly dips to less than $25 billion before moving to $150 billion in the first quarter of 2009 and $100 billion in the second quarter. Acquisitions of bonds and notes begin at less than $50 billion in 2002 and rise to $450 billion in the first half of 2007. Bonds and notes drop to $300 billion in the next period, return to $450 billion in the first half of 2008 and steadily decline from there to less than $100 billion by the second quarter of 2009. Acquisitions of money market instruments begin at $50 billion, and oscillate between small positive and small negative values until the end of 2007. Money market instruments return to just less than $50 billion in the first half of 2008, followed by a drop below $25 billion at the end of 2008 and a move above $50 billion in the first quarter of 2009. Acquisitions of these securities drop to around $25 billion in the second quarter of 2009.

The bottom panel displays foreign net acquisitions of domestic equity, bonds and notes, and money market instruments for Japan. Acquisitions of equity begin as a small, negative value in 2002, and hover between $100 billion and $200 billion from 2003 through the first half of 2007. Equity then steadily decreases until reaching negative $150 billion in the first quarter of 2009 and ends at a level near $50 billion in the second quarter. Acquisitions of Bonds and notes maintain small negative values in 2002 and 2003, and rise to just less than $100 billion in the second half of 2007. After 2007, bonds and notes dip negative and decrease to negative $100 billion in the second quarter of 2009. Acquisitions of money market instruments take small positive values in 2002 and 2003. Acquisitions of these securities rise to $50 billion the next year, drop to a small negative value in 2005, and return to $50 billion in 2006. In the first half of 2007, money market instruments fall to negative $50 billion, jump abruptly to $250 billion in the next period, and decline to negative $100 billion by the second half of 2008. Money market instruments increase to $100 billion in the second quarter of 2009.

NOTE: See general note to Figure 1.

SOURCE: Staff estimates from balance of payments accounts as reported by the European Central Bank, U.K. Office for National Statistics, and Bank of Japan via Haver Analytics.

Figure 25. Cross-border portfolio investment: Domestic holdings of foreign securities adjusted for domestic net acquisitions for the euro area, the United Kingdom, and Japan, and such holdings also adjusted for valuation changes, 2005-09.

Data are plotted as curves. Units are billions of U.S. dollars. The Figure contains three panels. The top panel depicts domestic holdings of foreign securities for the euro area adjusted for domestic net acquisitions, and such holdings also adjusted for valuation changes. Holdings adjusted for domestic net acquisitions rise consistently from just more than $4.0 trillion in 2005 to $6.0 trillion mid-2008. The curve then declines slightly and levels off at around $5.8 trillion. Holdings adjusted for domestic net acquisitions and valuation changes increase from just more than $4.0 trillion in 2005 to a peak of $7.0 trillion mid-2008. This curve falls drastically, dropping to $4.9 trillion in early 2009.

The middle panel shows domestic holdings of foreign securities for the United Kingdom adjusted for domestic net acquisitions, and such holdings also adjusted for valuation changes. Holdings adjusted for domestic net acquisitions rise steadily from $2.1 trillion in 2005 to $2.8 trillion in the middle of 2007. These holdings decline gradually to just more than $2.5 trillion at the end of 2008. The curve then increases slightly to $2.6 trillion by mid-2009. Holdings adjusted for domestic net acquisitions and valuation changes feature a pronounced rise from $2.1 trillion in 2005 to a peak of $3.4 trillion in mid 2007. After 2007, these holdings decline gradually for the first half of 2008 but drop sharply to $2.5 trillion at the end of the year. The curve returns to $2.8 trillion by mid-2009.

The bottom panel displays domestic holdings of foreign securities for Japan adjusted for domestic net acquisitions, and such holdings also adjusted for valuation changes. Holdings adjusted for domestic net acquisitions rise consistently from $200 billion at the beginning of 2005 to $270 billion by mid-2009. Holdings adjusted for domestic net acquisitions and valuation changes increase from $200 billion in 2005 to a peak of $275 billion at the beginning of 2008. These holdings then fall throughout 2008 to a level of $230 billion but increase to $250 billion by mid-2009.

SOURCE: Staff estimates from international investment positions and balance of payments accounts as reported by the European Central Bank, U.K. Office for National Statistics, and Bank of Japan via Haver Analytics.

Figure 26. Cross-border portfolio investment: Foreign holdings of domestic securities adjusted for foreign net acquisitions for the euro area, the United Kingdom, and Japan, and such holdings also adjusted for valuation changes, 2005-09.

Data are plotted as curves. Units are billions of U.S. dollars. The Figure contains three panels. The top panel shows foreign holdings of domestic securities for the euro area adjusted for foreign net acquisitions, and such holdings also adjusted for valuation changes. Holdings adjusted for foreign net acquisitions increases steadily from $5.7 trillion at the beginning of 2005 to $8.8 trillion by the middle of 2009. Holdings adjusted for foreign net acquisitions and valuation changes increase more rapidly initially, rising from $5.7 trillion in 2005 to a peak of $10.0 trillion at the beginning of 2008. These holdings fall to a final value of $8.0 trillion in the first quarter of 2009.

The middle panel displays foreign holdings of domestic securities for the United Kingdom adjusted for foreign net acquisitions, and such holdings also adjusted for valuation changes. Holdings adjusted for foreign net acquisitions rise from an initial value of $2.5 trillion to $4 trillion in the middle of 2009. Holdings adjusted for foreign net acquisitions and valuation changes increase from $2.5 trillion in 2005 to $3.9 trillion at the beginning of 2008, rising the most quickly in 2006 and the first half of 2007. These holdings contract sharply near the end of 2008 to a level of $2.7 trillion and rise to $3.4 trillion in mid-2009.

The bottom panel depicts foreign holdings of domestic securities for Japan adjusted for foreign net acquisitions, and such holdings also adjusted for valuation changes. Holdings adjusted for net foreign acquisitions rise from a starting value of $120 billion to $175 billion in mid-2008. Over the next year these holdings gradually decline until reaching $160 billion in mid-2009. Holdings adjusted for net foreign acquisitions and valuation changes increase from $120 billion in 2005 to a peak of almost $200 billion in mid-2008, with much of the increase occurring in 2006 and the second half of 2005. These holdings then fall to $120 billion in the beginning of 2009 and return to $150 billion by mid-2009.

SOURCE: Staff estimates from international investment positions and balance of payments accounts as reported by the European Central Bank, U.K. Office for National Statistics, and Bank of Japan via Haver Analytics.

Figure A. Change in prices of U.S. corporate asset-backed securities, by type of security, 2006-09.

The data are shown as curves. Data are plotted monthly for the period February 2006 through June 2009. The U.S. corporate fixed rate asset-backed index moves only slightly between about 98.5 and a little more than 100 from February 2006 through October 2007. It then begins to decline fairly steadily to reach about 90 by August 2008, and then falls sharply to about 79.5 by December 2008. The index rebounds to about 84 in January 2009, and then increases with some monthly variation to reach almost 90 by June 2009. The U.S. corporate floating rate asset-backed index is very steady at about 100 from February 2006 through June 2007 and then begins to decline fairly steadily to reach about 93 by January 2008, falls more to about 87 by March 2008, edges up to almost 88 by May 2007, and then begins to decline again, falling to about 85 by August 2008 and then falls sharply to about 72 by December 2008. The index rebounds to about 77 in January 2009. It then increases to about 79 by April 2009 and to almost 84.5 by June 2009.